As AI hunger devours the global supply of NAND and DRAM, the consumer electronics industry faces an unprecedented “massive die-off.”
- The Survival Gap: A critical shortage of DRAM and NAND flash memory is predicted to bankrupt numerous system integrators and consumer electronics firms by the end of 2026.
- The Price of Progress: Essential components like 8 GB eMMC chips have skyrocketed from $1.50 to $20, making the production of budget-friendly devices under $100 virtually impossible.
- The AI Monopoly: Major manufacturers are pivoting supply toward AI giants like NVIDIA, leaving traditional consumer tech—from smartphones to routers—in a three-year-long waiting line for parts.
The consumer electronics world is standing at a volatile crossroads, and according to Phison CEO Khein-Seng Pua (also known as Chien Chen Pang), the road ahead is littered with the remains of companies that simply won’t make it. In a series of sobering interviews, including a recent appearance on Taiwan’s Era News, the leader of the NAND flash controller giant warned of a looming “massive die-off” within the industry. The culprit? An acute, systemic shortage of memory components that is decoupling the cost of manufacturing from the reality of consumer pricing.
The Death of the Budget Device
The most immediate threat lies in the “cost-effective” sector—the gadgets we often take for granted, such as Wi-Fi routers, smart TVs, and set-top boxes. These devices rely on small amounts of DRAM and NAND flash to function. However, the economics of these products have been shattered. Pua highlighted a staggering example: an 8 GB eMMC chip, which cost a mere $1.50 in early 2025, has surged to nearly $20 today.
For a manufacturer trying to sell a streaming stick or a tablet for under $100, a thirteen-fold increase in the cost of a single core component is a death sentence. As these prices fluctuate and availability remains near zero, many system integrators will be forced to exit product lines or face total bankruptcy before the close of 2026.
A Seller’s Market Like No Other
The crisis isn’t just about the price tag; it’s about who holds the keys to the kingdom. We have entered a “seller’s market” so aggressive that it borders on the surreal. Reports indicate that memory manufacturers are now demanding payment for orders three years in advance. If a company wants DRAM reels today, they may not see them arrive until 2030.
This supply stranglehold is being driven by the “unprecedented” demand for Artificial Intelligence. High-end AI chips, such as NVIDIA’s Vera Rubin series, are consuming a terrifying portion of global resources. A single Vera Rubin chip is often paired with a 20+ TB SSD; collectively, these AI shipments are estimated to swallow 20% of the entire global non-data storage NAND supply for 2025. When the giants of AI sit at the table, the manufacturers of smartphones and home appliances are left with the crumbs.
The Long Road to Recovery
The collateral damage is already visible. Global mobile phone shipments are expected to plummet by 200 to 250 million units as rising costs make mid-range and budget handsets non-viable. Industry leaders like ADATA Chairman Chen Lebai have echoed these concerns, noting that major players like Samsung, SK Hynix, and Micron are prioritizing high-margin AI orders over everything else.
While the outlook is grim, there is a faint light at the end of the decade. Relieve may arrive as manufacturers build more foundry capacity, though Pua notes it takes at least two years from a factory’s announcement to its first production run. Furthermore, geopolitical shifts—such as the potential re-entry of Chinese DRAM and NAND companies into the global fold—could eventually break the current monopoly. Until then, the consumer electronics landscape is entering a period of brutal consolidation where only the most well-funded and strategically stocked will survive.